Corporate risk prep

Why Being Prepared Matters: Key Steps and Lessons from Consumer Brands and Beyond

April 26, 2023

The nature of preparedness and the level of which is required has shifted quite drastically for companies over the past decade and even more so over the past three years. How a company responds to an issue, or a crisis, affects its reputation among key audiences, including consumers, customers, employees, shareholders, regulators and legislators. These audiences observe how a company handles a crisis, which can either damage or enhance their reputation, and lead to business losses or gains.

As geopolitical tensions and issues increase, a global approach is even more pertinent to manage reputation and prevent crises. Companies need to enact issues preparedness at a global level, implementing localized frameworks for cultural, regulatory and legal differences. Organizations rolling out global crisis management functions should ensure that regional teams feel empowered to operate within the framework but can assess and respond to issues based on local nuances.

APCO’s Q2 Geopolitical Risk Radar, which anticipates the global and regional issues that will affect the global operating environment in the second quarter of 2023, outlines examples of interconnected trends and insights that can inform business decisions in the face of an unprecedentedly complex global landscape. However, the level of response and specific actions should, in some cases, be guided at the local level.  

When launching a global issue management framework across markets and local affiliates, organizations should consider strategies that will enhance the way the framework is introduced to the entire global network. To do this, there are certain protocols an organization should follow to ensure alignment and awareness of global issues and crisis management plans to be set up for success.   

  • Develop a Corporate Governance Structure. Teams should be identified to own the framework and act as the oversight to ensure plans are being reviewed and evolved to consider any changing business needs.  
  • Ensure Leadership Buy-in. Having leaders who support the efforts to develop a framework and can communicate about the importance of developing these policies will help ensure those who are responsible for using it understand the significance of following these policies. 
  • Create Accountability. Identifying team members who should own and manage the framework at each regional level will ensure team members understand their roles within the framework and the critical business implications for having one in place.  
  • Establish Regular Cadence of Engagement. Finally, organizations must establish a regular cadence of engagement to ensure that their preparedness plans are reviewed and updated on an ongoing basis. This includes conducting regular training sessions and drills, reviewing and updating the plan based on new information or changes in the organization’s operations or risks, and communicating updates to all relevant stakeholders. Updates can also include new risks and other considerations based on the evolving landscape as well as new functions within the organization who may be required to use the plan.   

With the ever-changing geopolitical environment, companies must act in lockstep with to avoid crisis. There are some prime examples of how companies are facing geopolitical challenges from not only consumers, but also from regulators and foreign governments.  

Additionally, when considering U.S. health care systems and the impact of the COVID-19 pandemic, taking a local approach to a global issue is critical to preparedness. It is generally thought that no country was fully prepared for the COVID-19 pandemic. Other barriers to control the spread of COVID-19 such as community resistance to mitigation efforts including travel restrictions, mask wearing, social distancing, etc. lead to high transmission rates. Hospitals were not ready to handle the influx of patients due to lack of critical funding and resources and almost every single industry was impacted in some way. The political climate in the United States had many impacts on the handling of COVID-19 and the importance of political will in its role of protecting people was tested. The COVID-19 outbreak also awakened much of the global population to the broken and overextended health systems in many parts of the world.  

Operationalizing risk preparedness for local and regional systems ensures that changes at any level or severity can be implemented in a timely manner, minimizing risk to the business and reputationally. We can and must be aware of the global implications on U.S. companies and businesses and prepare, both globally and locally. 

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